British taxman vows to treat struggling dairy farmers 'sympathetically'

By Mark ASTLEY

- Last updated on GMT

(Image: Flickr/Money Image)
(Image: Flickr/Money Image)

Related tags British dairy farmers Dairy United kingdom

HM Revenue and Customs (HMRC), responsible for the collection of UK tax, has vowed to treat struggling British dairy farmers “sympathetically.”

Its stance follows a meeting with representatives from the Department of Environment, Food and Rural Affairs (DEFRA) and the National Farmers Union (NFU) to discuss the cash flow problems currently being experienced by British dairy farmers. 

With UK milk prices well below the cost of production, many British dairy farmers are operating at a loss. 

In a statement sent to DairyReporter.com, HMRC said its officers have been made “aware of the current issues.” 

“HMRC has worked with DEFRA officials and with the National Farmers Union (NFU) to ensure that all our debt collectors are aware of current issues in the dairy farming industry and are able to treat affected farmers sympathetically and in line with our regular approach to Time to Pay,” ​said HMRC.

Time to Pay is designed to help businesses suffering cash flow problems.

Short term Time to Pay agreements - between three and 12 months - can be arranged for those that can demonstrate their current inability pay their taxes. 

Milk prices

As a result of global volatility, driven by falling demand, increased production, and the Russian trade ban, UK milk prices fell significantly in the second half of 2014.

In November 2013, the average UK milk price stood at 34.55 pence per litre (ppl), according to DEFRA.

By December 2014, this figure had fallen to 27.85ppl,​ although many farmers are evidently receiving much less. 

First Milk, which last month delayed milk payments, is, for example, currently offering 21.57ppl - far short of the reported 30ppl production costs faced by British farmers.

As a result, dairy farmer numbers in the UK are expected to fall below 10,000 - down from more than 35,000 in 2005.

In January 2015, with the plight of British dairy farmers making headlines, British Prime Minister David Cameron​ told MPs steps would be taken to ascertain whether HMRC was "prepared to provide the time to pay to support our farmers."

Last week, George Eustice, Parliamentary Under Secretary of State for Environment, Food and Rural Affairs, said those hardest hit by the fall in milk prices should be allowed to defer tax payments or pay their bill in instalments. 

“HMRC has procedures in place internally that enable it to show forbearance to particular sectors of individual business that are suffering financial distress as a result of a sudden change in their fortunes caused by market changes,”Eustice told Farmers Weekly.

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